Merkel and Sarkozy to hold euro talks

Sunday 08 January 2012 15.57
German Chancellor Angela Merkel and French President Nicolas Sarkozy
German Chancellor Angela Merkel and French President Nicolas Sarkozy

German Chancellor Angela Merkel will host French President Nicolas Sarkozy tomorrow, kicking off a week of high-level talks to lay the groundwork for a crunch EU summit on taming the eurozone crisis at the end of the month.

The duo at the heart of European efforts to stem the debt-driven turmoil threatening the single currency will gather in Berlin for their first monthly meeting in what is certain to be a rocky year.

While Ms Merkel and Mr Sarkozy had made a show of unity, in recent weeks strategic differences have begun to emerge over plans to introduce a financial transaction tax in the EU.

Mr Sarkozy, who is facing an uphill battle for re-election this year, said France would charge ahead and roll out the tax on its own if necessary to set an example for Europe.

"We won't wait for others to agree to put it in place, we'll do it because we believe in it," he said Friday after talks in Paris with Italian Prime Minister Mario Monti, who urged France not to go it alone.

Berlin also resisted Mr Sarkozy's call, saying it was still trying to build the broadest possible consensus for the tax, seen as a revenue generator and a penalty on speculation, in the face of fervent opposition from Britain.

The European Commission has adopted plans for the so-called "Robin Hood tax" but support would need to be unanimous among the 27 member states for it to be introduced across the EU.

Germany, which has said it could live with a tax applying only to the 17-member eurozone, said the issue was one of several on the agenda of tomorrow's meeting.